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A fortune book

Before I realised that it has been a week since this page has been updated, I have been reading a book that has changed thought processes and opened up opportunities for business. It is aptly titled “The Fortune at the Bottom of the Pyramid (BOP)”. Before I started reading it, I thought it would be another of those best-selling books, interesting only to a select few. How wrong I was.

I had just read Abdul Kalam’s India 2020, a book with a vision of India being a developed country by 2020 and implementation tips for India in strategic and essential industries. Dr. Kalam is a passionate advocate of technology and outlines a roadmap for India in agriculture, agro-based businesses, chemicals, manufacturing, IT and strategic industries to be self-sufficient by 2020. For any one interested in sustainable development and fiercely patriotic, it is a must-read. The book ends with an action plan on how every individual and organisation could contribute to this vision.

This should have prepared me for the interesting insights the BOP book gives. Most of us would have heard rave reviews of the book (praise from Bill Gates and Madeleine Albright, among others). It is not one of those great books I would have missed to read, thanks to our library. The book’s premises fit in just over 100 pages and the rest of the 400page long book is filled with cases of success stories from India (as expected of a Coimbatore guy) and Latin America.

The first chapter is about the power of dominant logic or established beliefs in any entity. It provides figures to illustrate the market at the BOP and the need to change your mindset if you want to be successful there. Prahlad says that the companies need to create abilities to consume (provide credit through savings and the 3 As – affordability say sachets, access and availability). The second chapter talks about the need to innovate in goods and services and explains 12 principles of innovation like a focus on price performance, process innovation (think Aravind Eye hospital), education of customers (think ITC e-choupal), …

The third chapter says how the BOP could be a global opportunity in four different ways. First there would be local growth opportunities in big countries like India or China. Second, innovations in one market could be adopted to other emerging economies. Third, such solutions could also be used in developed markets, cutting down costs and benefitting the consumers. Four, challenges in management and innovation provide unique lessons that contribute to the growth of all the participants.

The fourth chapter talks about a market-oriented ecosystem, where MNCs, NGOs, governments and consumers form a network of relationships and engage in win-win partnerships. In the next chapter I discover Hernando de Soto (a Peruvian economist) and his Mystery of Capital. I strongly suggest that you read the previous link, where he tells us how capitalism has failed in developing/emerging economies mainly because of the phenomenon of trapped assets or the lack of property rights – that promote the formation of capital – which is a given in developed nations.

The fifth chapter talks about Transaction Governance Capacity (TGC), which means open, clear, honest and trustworthy transactions. The case of eSeva, an AP government initiative and the Centre for Good Governance, another AP government initiative, is discussed in this chapter. The last chapter talks about how sustainable development transforms the society. Women are seen as critical for development. HLL’s Project Shakti is a fine example. I have not read the book in its entirety. The cases are pending. I have read one Brazilian retailer’s (Casas Bahia) story, a Mexican cement (Cemex) tale and HLL’s Annapurana salt story. There is a mention of Tuticorin in the last story as a salt town in India. That should be reason enough for me to whole-heartedly recommend this book to anyone who cares for developmental initiatives to reach all sections of the society, with reasonable profits as is expected for a business.

Bonus: Liberty is an important pursuit for a happy man and here is its philosophy. When you are at the site, you could also download a primer to economics called “The Adventures of Jonathan Gullible.”

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